India’s Reliance Defense Ltd has signed a manufacturing and maintenance deal worth $6 billion with Russian weapons maker Almaz-Antey. The deal's announcement on Thursday comes during Indian Prime Minister Narendra Modi's visit to Moscow aimed at strengthening defense ties.
State-owned Almaz-Antey is known for its S-400 air defense systems that the Indian military was reportedly looking to buy. Earlier this week, Indian defense ministry sources told local media that the government will acquire five S-400 air defense systems at an estimated cost of about $4.5 billion in a bid to modernize the country's defenses against airborne attacks.
“The two sides identified the air defense missile systems ... radars and automated control systems as areas of partnership under the ‘Make in India’ as well as offset policies of the Indian Ministry of Defense," Reliance Defense said in a statement Thursday.
The offset policy necessitates that global defense contractors invest a percentage of the value of any deal in India to help it build a defense industrial base. India — the biggest buyer of arms in the world — is expected to spend about $250 billion over the next decade to upgrade its military.
Reliance is counting on close ties with Russian defense companies to establish a lead in India’s fast-growing domestic defense sector. The company said it had discussed taking over maintenance and overhauling duties for Almaz-Antey systems already in use by the Indian armed forces.
Earlier this month, Reliance Defense’s parent company Reliance Infrastructure took management control of Pipavav Defense and Offshore Engineering, which has built patrol vessels for the Indian navy.
India and Russia are reportedly set to sign defense deals worth billions. The Asian country has turned to Russia as Modi’s “Make in India” push for India’s military has met with little success with Western powers as talks stalled over issues such as technology transfer and local assembly of equipment, according to reports.
"While others are making promises, Russia is moving forward with the Make-in-India program," a Russian government source told Reuters.